Kenya urged to address challenges manufacturers face

Kenya’s government has been urged to address challenges manufacturers face amid the implementation of the Africa Continental Free Trade Area (AfCFTA)
The government is yet to put in place mechanisms to ensure the country takes full advantage of the benefits of AfCFTA to manufacturers
Dwindling country competitiveness and lack of product competitiveness

The government of Kenya has been urged to address challenges manufacturers face amid the implementation of the Africa Continental Free Trade Area (AfCFTA).

Kenya Association of Manufacturers (KAM) Acting CEO Tobias Alando noted that whereas the trade agreement provides the best opportunity to realise the regional, national and business goals, Kenya is yet to put in place mechanisms to ensure the country takes full advantage of the benefits of AfCFTA to manufacturers.

Challenges facing manufacturers in Kenya

Alando noted that the export market in Africa is expected to increase with the full implementation of AfCFTA. However, if unaddressed, challenges manufacturers face, as far as the implementation of AfCFTA goes, include dwindling country competitiveness and lack of product competitiveness.

Other challenges include supply chain constraints, an unconducive business environment, and institutional and infrastructural constraints that could hinder local manufacturers from reaping the benefits of AfCFTA.

He spoke during the launch of the KAM Study Findings on the Implications of AfCFTA on Kenyan Products.

Alando gave recommendations to enable Kenyan manufacturers to thrive under the trade agreement.

“At the firm level, Kenya’s business community needs to develop export strategies for various trade agreements, including EAC, COMESA and AfCFTA. The country should also implement business development programmes to penetrate and expand to new markets and develop the capacity to meet the demands of the African markets,” he said.

“At the national level, we urge Government to prioritise the conclusion of pending areas in the negotiations; work on competitiveness drivers to ensure Kenya takes advantage of the African market and fully implement the National AfCFTA Strategy.”

Benefits Kenya will get from AfCFTA

Kenya Revenue Authority (KRA) Deputy Commissioner, Marketing and Communications Grace Wandera expressed optimism that the country will be better positioned to trade under AfCFTA.

Wandera said KRA is putting in place initiatives to ease trade, which is among the benefits Kenya will get from AfCFTA.

“We have automated our services, reducing the time spent clearing cargo and bringing down costs incurred by traders. We remain cognisant of the benefits of AfCFTA, such as job creation, movement of goods, and skills transfer,” Wandera said.

“This will require tariff harmonisation, capacity building on requirements to trade under the regime, simplification and automation of processes. We have also set up call centres at all border points to support traders and ensure efficient service delivery.”

The EAC should integrate to benefit from AfCFTA

Number of African Union member states signed the AfCFTA agreement

AfCFTA Negotiator at the State Department for Trade, Josiah Rotich, observed that implementing AfCFTA is on track.

According to the official, 54 African Union member States signed the AfCFTA Agreement, whereas 49 Member States have ratified the Agreement.

These Member States are eligible to trade under the AfCFTA preferential trade arrangement, whose implementation started on 1st January 2021.

“46 Member States, including the four Customs Union (Central African Economic and Monetary Community – CEMAC, Southern African Customs Union – SACU, EAC and ECOWAS), have submitted their tariff offers, out of which 30 have been verified.”

The KAM study on implementing the AfCFTA sought to inform local manufacturers of the implications and expected impact of the EAC-AfCFTA tariff liberalisation on Kenya’s manufacturing sector. It also seeks to inform the industry about the country’s trade potential with other regional Economic Communities (RECs) and potential competitors.

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In a recent report, the East African Business Council (EABC) warned that the benefits of the AfCFTA will not materialise without the pending trade barriers being addressed.

The lack of harmonised standards, failure to implement the Single African Air Transport Market (Saatm) and the export of raw commodities remain the continent’s biggest obstacles to trade. In addition, African countries have some of the most rigid visa and work permit requirements, they have multiple testing agencies and erect unnecessary roadblocks for random checks along transport corridors which increases the cost of cross-border trade.

This, eventually, deals a blow to the Micro, Small and Medium Enterprises (MSMEs) which also happen to be the backbone of the continent’s economy.

EABC trade and policy advisor, Adrian Njau, said that for AfCFTA to be successful, all African countries must address more non-tariff barriers and build value chains in the various regions.